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Shell CFO steps down over scandal

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Royal Dutch/Shell Group, Europe's second-largest oil company, said that chief financial officer Judith Boynton would leave her post, the third senior executive to suffer after the company for years overstated its reserves.

Ms Boynton, 49, who came from Polaroid Corp and who ranked among the world oil industry's most senior women, will stay with the company.

Her departure comes after Shell's audit committee, comprising non-executive directors and outside lawyers, investigated why proved oil and gas reserves had been overstated by 20 per cent. Reserves are among an oil company's key assets.

The January 9 cut in reserves at Shell, based in London and The Hague, led to the ouster of chairman Philip Watts and another top executive, and probes by the US Securities and Exchange Commission, Justice Department, and European regulators.

Last month Shell lowered its reserves a second time and did not rule out further decreases.

Some analysts, among them J.J. Traynor of Deutsche Bank AG in Edinburgh, Scotland, expected the audit committee's report to focus on how vagueness in SEC guidelines on proved reserves and Shell's decentralised structure contributed to the error, rather than making scapegoats of individuals.

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Walter van de Vijver, 48, who was asked to resign as Shell's head of oil and gas on March 3, on April 13 issued a statement defending his role. He said he had raised the issue of possible overbooked reserves promptly with other senior managers.

Mr Watts, 58, has not been available for comment since he left the company, also on March 3. His lawyer, Joseph Goldstein, of Crowell & Moring, has declined to comment.

Oil companies report reserves to the SEC to show "with reasonable certainty" how much can be recovered. Since Shell's disclosure, some analysts have called for the rules to be overhauled because of improvements in the technology used to assess reserves.

Shell lowered its reserves a second time and did not rule out further decreases. JUDITH BOYNTON

The surprise reduction in reserves increased investor concern about growth at Shell's oil and gas unit, which in 2003 missed a target to boost output and has failed in recent years to discover fields to replace production.

Shell faces more than 10 lawsuits in the US in connection with the cut in reserves. It has hired Washington-based law firm Debevoise & Plimpton to advise on the regulatory investigations and lawsuits.

The company must abide by SEC rules because it has securities that trade in the US. Shell is also in contact with market regulators in Britain.